Question 1

Usually the poorest fifth of the population in a developing country receives more than 20 percent of the country's income.

Accepted Answer

A) True 
 B)False  False

Question 2

A trend in developing countries is that

Accepted Answer

A) the birth rate during a typical woman's lifetime has increased from three to six children 
B) attitudes toward family size are changing 
C) when women have employment opportunities outside the home, fertility rates increase 
D) as women become better educated, they earn less 
E) as women become less educated, they tend to have fewer children 
A) the birth rate during a typical woman's lifetime has increased from three to six children 
B) attitudes toward family size are changing 
C) when women have employment opportunities outside the home, fertility rates increase 
D) as women become better educated, they earn less 
E) as women become less educated, they tend to have fewer children B

Question 3

Social capital is

Accepted Answer

A) the shared values and trust that promote cooperation in the economy 
B) the buildings and equipment used to produce goods and services 
C) a government regulation aimed at improving health and safety 
D) the accumulated knowledge, skill, and experience of the labor force 
E) the owner's own or borrowed money invested in a business 
A) the shared values and trust that promote cooperation in the economy 
B) the buildings and equipment used to produce goods and services 
C) a government regulation aimed at improving health and safety 
D) the accumulated knowledge, skill, and experience of the labor force 
E) the owner's own or borrowed money invested in a business A

Question 4

Which of the following can help shape the incentive structure of the country of Gammaland?

Accepted Answer

A) resource availability 
B) prices 
C) income 
D) incentives 
E) All of the answers are correct 
A) resource availability 
B) prices 
C) income 
D) incentives 
E) All of the answers are correct

Question 5

Labor productivity depends on the

Accepted Answer

A) the effectiveness of government 
B) the availability of technology 
C) the proportion of the labor force that is unionized 
D) the size of the economy 
E) All of the answers are correct 
A) the effectiveness of government 
B) the availability of technology 
C) the proportion of the labor force that is unionized 
D) the size of the economy 
E) All of the answers are correct

Question 6

When a developing country relies on import substitution,

Accepted Answer

A) it sacrifices the gains from specialization and comparative advantage 
B) replaces low-cost foreign goods with high-cost domestic goods 
C) domestic producers, shielded from foreign competition, usually fail to become efficient 
D) other countries often retaliate with their own trade restrictions 
E) All of the answers are correct 
A) it sacrifices the gains from specialization and comparative advantage 
B) replaces low-cost foreign goods with high-cost domestic goods 
C) domestic producers, shielded from foreign competition, usually fail to become efficient 
D) other countries often retaliate with their own trade restrictions 
E) All of the answers are correct

Question 7

Foreign aid often becomes a source of discretionary funds that benefit poor people in developing countries and not the countries' leaders.

Accepted Answer

A) True 
 B)False

Question 8

One possible reason that the country of Whatsis is trapped in poverty is

Accepted Answer

A) a lack of mineral wealth 
B) an honest and functional government 
C) laws and regulations to help detect fiscal fraud 
D) a free press 
E) a civil war 
A) a lack of mineral wealth 
B) an honest and functional government 
C) laws and regulations to help detect fiscal fraud 
D) a free press 
E) a civil war

Question 9

The World Bank sorts countries into the following three major groups:

Accepted Answer

A) high-income economies, middle-income economies, low-spending economies 
B) high-spending economies, middle-spending economies, low-spending economies 
C) super-high-income economies, middle-income economies, low-income economies 
D) high-income economies, middle-income economies, zero-income economies 
E) high-income economies, middle-income economies, low-income economies 
A) high-income economies, middle-income economies, low-spending economies 
B) high-spending economies, middle-spending economies, low-spending economies 
C) super-high-income economies, middle-income economies, low-income economies 
D) high-income economies, middle-income economies, zero-income economies 
E) high-income economies, middle-income economies, low-income economies

Question 10

Successful management of resource wealth is a poverty trap

Accepted Answer

A) True 
 B)False

Question 11

The bulk of exports from industrial countries are

Accepted Answer

A) manufactured goods 
B) primary products 
C) agricultural goods 
D) raw materials 
E) raw sugar products 
A) manufactured goods 
B) primary products 
C) agricultural goods 
D) raw materials 
E) raw sugar products

Question 12

If the country of Zorg has a birth rate of greater than 2.2 births per woman, it is likely that Zorg is an industrial market country.

Accepted Answer

A) True 
 B)False

Question 13

A firm should be transparent, meaning

Accepted Answer

A) the windows at headquarters should be cleaned regularly 
B) if executives lie during a stockholder meeting, people should be able to see right through them 
C) someone should be able to look at the books and the balance sheet and tell exactly what's going on 
D) None of the answers is correct 
E) All of the answers are correct 
A) the windows at headquarters should be cleaned regularly 
B) if executives lie during a stockholder meeting, people should be able to see right through them 
C) someone should be able to look at the books and the balance sheet and tell exactly what's going on 
D) None of the answers is correct 
E) All of the answers are correct

Question 14

Production and exchange depend on an reliable infrastructure of

Accepted Answer

A) transportation 
B) communication 
C) sanitation 
D) electricity 
E) All of the answers are correct 
A) transportation 
B) communication 
C) sanitation 
D) electricity 
E) All of the answers are correct

Question 15

If the country of Heehee makes the transition from central planning to a market economy in a matter of months, it is an example of the big-bang approach.

Accepted Answer

A) True 
 B)False

Question 16

If the centrally planned economy of Rowboat dismantles central controls before institutions such as property rights are in place, instability will most likely result.

Accepted Answer

A) True 
 B)False

Question 17

Economic systems can be classified based on

Accepted Answer

A) the ownership of resources only 
B) the ownership of resources, the types of crops grown, and the incentives used to motivate people 
C) the way resources are allocated to produce goods and services and the incentives used to motivate people only 
D) the ownership of resources, the way resources are allocated to produce goods and services, and the incentives used to motivate people 
E) the ownership of resources, the way resources are allocated to produce goods and services, and the average education of workers 
A) the ownership of resources only 
B) the ownership of resources, the types of crops grown, and the incentives used to motivate people 
C) the way resources are allocated to produce goods and services and the incentives used to motivate people only 
D) the ownership of resources, the way resources are allocated to produce goods and services, and the incentives used to motivate people 
E) the ownership of resources, the way resources are allocated to produce goods and services, and the average education of workers

Question 18

Regarding the institutional requirements of efficient markets,

Accepted Answer

A) Western economic theory ignores the operation of efficient markets 
B) market economists have an almost perfect understanding 
C) market economists would never take the necessary institutions for granted 
D) those involved in a transition from centrally planned economy must develop a deep appreciation 
E) None of the answers is correct 
A) Western economic theory ignores the operation of efficient markets 
B) market economists have an almost perfect understanding 
C) market economists would never take the necessary institutions for granted 
D) those involved in a transition from centrally planned economy must develop a deep appreciation 
E) None of the answers is correct

Question 19

One likely reason that the country of Appleland is poor is that it

Accepted Answer

A) does not produce many goods and services 
B) has highly educated and productive female workers 
C) has a low birth rate 
D) enjoys a low infant mortality rate 
E) has a high literacy rate 
A) does not produce many goods and services 
B) has highly educated and productive female workers 
C) has a low birth rate 
D) enjoys a low infant mortality rate 
E) has a high literacy rate

Question 20

Which of the following is true about GNP?

Accepted Answer

A) includes profits earned by a Mercedes factory in Alabama 
B) excludes profits earned by General Electric in India 
C) measures the market value of all goods and services produced by resources supplied the home country's residents and firms, regardless of the location of the resource 
D) stands for Generally Nice Products 
E) used by countries to classify the World Bank 
A) includes profits earned by a Mercedes factory in Alabama 
B) excludes profits earned by General Electric in India 
C) measures the market value of all goods and services produced by resources supplied the home country's residents and firms, regardless of the location of the resource 
D) stands for Generally Nice Products 
E) used by countries to classify the World Bank

Exam 20: Economic Development

Usually the poorest fifth of the population in a developing country receives more than 20 percent of the country's income.

A trend in developing countries is that

Social capital is

Which of the following can help shape the incentive structure of the country of Gammaland?

Labor productivity depends on the

When a developing country relies on import substitution,

Foreign aid often becomes a source of discretionary funds that benefit poor people in developing countries and not the countries' leaders.

One possible reason that the country of Whatsis is trapped in poverty is

The World Bank sorts countries into the following three major groups:

Successful management of resource wealth is a poverty trap

The bulk of exports from industrial countries are

If the country of Zorg has a birth rate of greater than 2.2 births per woman, it is likely that Zorg is an industrial market country.

A firm should be transparent, meaning

Production and exchange depend on an reliable infrastructure of

If the country of Heehee makes the transition from central planning to a market economy in a matter of months, it is an example of the big-bang approach.

If the centrally planned economy of Rowboat dismantles central controls before institutions such as property rights are in place, instability will most likely result.

Economic systems can be classified based on

Regarding the institutional requirements of efficient markets,

One likely reason that the country of Appleland is poor is that it

Which of the following is true about GNP?

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand Supply and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

The Algebra of Income and Expenditure

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

The Algebra of Demand-Side Equilibrium

International Trade

International Finance

National Income Accounts

Understanding Graphs

Variable Net Exports

Variable Net Exports Revisited

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